Tariffs leave Global Market recovering and bracing for further impacts

By Madalyn Jimiera

On Tuesday, President Trump’s tariffs against China, Mexico, and Canada went into effect, and the Global Market quickly became aware of the effects. 

“A trade war might have short-term reflationary implications,” said Ian Lyngen, an interest rate strategist at BMO Capital Market to The New York Times. “It also carries with it significant risks to global growth.”

The day ended with the S&P 500 down 1.2 percent. The Nasdaq Composite moderately recovered in the afternoon after dropping into a correction – a drop 10 percent or more from its recent peak. Financial and industrial stocks were the hardest-hit sectors while tech was the only one to end the day higher, just by a fraction of a percentage point.

Concerns surge surrounding the economy’s ability to withstand the tariffs, paralleled by investors shifting expectations regarding the Federal Reserve’s cut on interest rates. The tariffs are likely to increase inflation, leaving the Fed to maintain high rates as a solution. Economists say the long-term effects of this situation manifest in slower economic growth and the risk of economic downturn. 

These declines in the market in recent days have canceled the gains made since Trump’s election victory. Investors who hoped his actions would pave the way to deregulation, business-friendly policies, and restraint on tariffs now fear the potential damage that the tariffs will leave behind after Tuesday.